The owner of a former Greenburgh title insurance agency has been charged with fraud for embezzling $1.6 million.
U.S. Attorney Damian Williams accused Ronald J. Rauschenbach of diverting funds that were supposed to be used for paying real estate taxes and fees, in a criminal information filed on April 23 in U.S. District Court, White Plains.
Rauschenbach, of Hopewell Junction, pleaded guilty at an arraignment before U.S. District Judge Vincent L. Briccetti. He posted a $200,000 personal appearance bond and was released from custody.
Rauschenbach was owner and president of Castle Title Insurance Agency Inc., on Knollwood Road in Greenburgh.
Title insurance agents protect mortgage lenders and homeowners by making sure that there are no problems with who actually owns a property. They also make sure that deeds and mortgages are recorded with the local government, and they use proceeds from the property sale to pay the recording fees and taxes.
From 2014 to June 2020, Rauschenbach kept more than $1.6 million entrusted to him, according to the charging papers, for personal use and to pay down earlier fees and taxes he had failed to pay. He was charged with mail fraud because money was sent and received by mail.
In 2021, the state Department of Financial Services revoked Castle’s and Rauschenbach’s license for “acts that evidenced incompetence and untrustworthiness” and for submitting untrue information on their license renewal.
Rauschenbach had acted as an agent for Stewart Title Insurance Co. and WFG National Title Insurance Co. They accused him in 2019 and 2020 of collecting fees but failing to timely record real estate transactions and pay the taxes. Both underwriters also accused him of breach of contract in complaints filed in Westchester Supreme Court.
In the Stewart Title lawsuit, the Department of Financial Services recounted, Rauschenbach indicated that he would invoke his Fifth Amendment privilege against self-incrimination if he was questioned about his use of customers’ trust funds.
Rauschenbach was also a licensed attorney, until last year. A district lawyers’ grievance committee accused him of four charges of professional misconduct, including fraudulent conduct.
He did not respond to the charges, and a panel of five justices of the state Second Appellate Division disbarred him on Nov.1
He is scheduled for sentencing in the criminal case on July 25.
